Power, patents, competition, and ecosystems: Google’s bid for Motorola Mobility


Yesterday I was interviewed on ABC TV about Google’s bid for Motorola Mobility.

The interview segments aired were on the value to Google of Motorola’s patent portfolio and the implications for the Android ecosystem.

Below are excerpts from the transcript of the interview on ABC.

ROSS DAWSON: One view is that Apple has done a fantastic job of providing one package of the hardware and the software. And so Google is trying to replicate that.

It is an interesting question. Does building (and marketing) mobile hardware and software as an integrated package create a superior offering? While Apple’s success seems to support that, it is very difficult to map their experience onto others. Nokia has failed at it. Yet there is now heightened talk of Microsoft acquiring Nokia in order to create another provider of an integrated package.

ROSS DAWSON: With Motorola, Google is buying 17,000 patents and 7,500 patents under application, which enables them to combat and position themselves, in terms of their patents, to be able to defend Android’s operating system, and more broadly use patents to position themselves effectively.

SIMON PALAN: They’re basically buying the right to protect themselves legally?

ROSS DAWSON: That’s right. These whole patent battles – each of these large technology companies have thousands of patents. They use them to play games against each other.

As Farhad Manjoo points out, Android is turning out to be far from free, at least for Google. The complexity of the mobile patent landscape means that a large portfolio of patents is required just to play the game. Just within the last year, the effective market cost of patents has increased significantly, mainly as measured by the acquisition value of companies that are otherwise essentially worthless.

ROSS DAWSON: All of the many, many Android smartphone manufacturers will now question: “We are now in direct competition with Google. Google is both creating the operating system which we’re using and they’re competing with us in terms of the handsets.” So that may put into question whether they want to be associated with Android.

There’s the rub. There’s a good case to make that Google, in becoming a mobile handset manufacturer, will be able to create the most compelling Android offering in the market. Which clearly makes Android a far less attractive proposition to other handset manufacturers which are now competing directly with the platform developer, which happens to have the market clout of Google. On the face of it, this could increase the attractiveness of Windows Phone to independent manufacturers, particularly since there are few other outstanding alternatives in the market, given the recent consolidation in mobile operating systems.

Interesting times in mobile – there will no doubt be plenty of interesting news to come in this space.